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UNITEDSTATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON D.C 20549-3010
DIVISION OF
CORPORATION FINANCE
January 17 2008
Paul Wilson
Senior Attorney
Legal Department
ATT Inc
175 Houston Room 222
San Antonio TX 78205
Re ATT Inc
Incoming letter dated December 10 2007
Dear Mr Wilson
This is in response to your letter dated December 10 2007 concerning the
shareholder proposals submitted to ATT by the LIUNA Staff and Affiliates Pension
Fund the SNET Retirees Association Inc and Jane Banfield We also have received
letter on behalf of the SNET Reitrees Association Inc dated January 14 2008 Our
response is attached to the enclosed photocopy of your correspondence By doing this
we avoid having to recite or summarize the facts set forth in the correspondence Copies
of all of the correspondence also will be provided to the proponents
In connection with this matter your attention is directed to the enclosure which
sets forth brief discussion of the Divisions informal procedures regarding shareholder
proposals
Sincerely Jonathan Ingram
Deputy Chief Counsel
Enclosures
cc Mark Speakes
Fund Administrator
LIUNA Staff Affiliates Pension Fund
905 16th Street N.W
Washington DC 20006-1765
ATT Inc
Incoming letter dated December 10 2007
Page of
cc Cornish Hitchcock
Attorney at Law
1200 Street NWSuite 800
Washington DC 20005
Jane Banfield
*** FISMA & OMB Memorandum M-07-16 ***
January 17 2008
Response of the Office of Chief Counsel
Division of Corporation Finance
Re ATT Inc
Incoming letter dated December 10 2007
The first proposal relates to compensation The second proposal urges the board
to determine future awards of performance-based compensation for executive officers
using measure of earnings that excludes non-cash pension credits that result from
projected returns on employee pension fund assets and to provide report to
shareholders
There appears to be some basis for your view that ATT may exclude the first
proposal under rule 14a-8f We note that the proponent appears to have failed to
supply within 14 days of receipt of ATTs request documentary support sufficiently
evidencing that it satisfied the minimum ownership requirement for the one-year period
required by rule 14a-8b Accordingly we will not recommend enforcement action to
the Commission ifATT omits the first proposal from its proxy materials in reliance on
rules 14a-8b and 14a-8f In reaching this position we have not found it necessary to
address the alternative basis for omission of the first proposal upon which ATT relies
We are unable to concur in your view that ATT may exclude portions of the
supporting statement in the second proposal under rule 14a-8i3 Accordingly we do
not believe that ATT may omit portions of the supporting statement in the second
proposal from its proxy materials in reliance on rule 14a-8i3
We are unable to concur in your view that ATT may exclude the second
proposal under rule 14a-8i1 We note that the first proposal will not be included in
ATTs 2008 proxy materials Accordingly we do not believe that ATT may omit the
second proposal from its proxy materials in reliance on rule 14a-8i1
Sincerely
Eduardo Aleman
Attorney-Adviser
Paul Wilson
Senior Attorney
tt Legal Department_t 175 Houston Room 222
San Antonio Texas 78205
210351-3326
1934Act/RuIel4a-8
December 10 2007
U.S Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 Street N.E
Washington DC 20549
Re ATT Inc 2008 Annual Meeting
Shareholder Proposals of LIUNA Staff and Affiliates Pension Fund and
SNET Retirees Association Inc
Ladies and Gentlemen
This letter and the material enclosed herewith are submitted on behalf of ATTInc ATT or the Company pursuant to Rule 14a-8j under the Securities
Exchange Act of 1934 as amended On October 31 2007 ATT received
shareholder proposal the LIUNA Proposal from the LIUNA Staff and Affiliates
Pension Fund the Staff and Affiliates Fund for inclusion in ATTs 2008 proxymaterials copy of the LIUNA Proposal and related correspondence is
attached hereto Subsequently on November 21 2007 ATT received
shareholder proposal the SRA Proposal and collectively with the LIUNA
Proposal the Proposals from SNET Retirees Association Inc SRA for
inclusion in ATTs 2008 proxy materials copy of the SRA Proposal is
attached hereto The SRA Proposal was co-sponsored by Jane Banfield For
the reasons stated below ATT intends to omit or modify one of the Proposals
from its 2008 proxy materials
Pursuant to Rule 14a-8j enclosed are six copies of this letter and the
attachments copy of this letter and the attachments is being mailed
concurrently to each proponent as notice of ATTs intention to omit one of the
Proposals from its 2008 proxy materials
Securities and Exchange Commission
December 10 2007
Page2of 11
Background
The LIUNA Proposal reads as follows
RESOLVED That the shareholders of ATT Inc Company requestthat the Board of Directors Executive Compensation Committee adopt
Pay for Superior Performance principle by establishing an executive
compensation plan for senior executives Plan that does the following
Sets compensation targets for the Plans annual and long-term
incentive pay components at or below the peer group medianDelivers majority of the Plans target long-term compensation
through performance-vested not simply time-vested equity
wardsProvides the strategic rationale and relative weightings of the
financial and non-financial performance metrics or criteria used in
the annual and performance-vested long-term incentive
components of the Plan
Establishes performance targets for each Plan financial metric
relative to the performance of the Companys peer companies andLimits payment under the annual and performance-vested Ion
term incentive components of the Plan to when the Companysperformance on its selected financial performance metrics exceeds
peer group median performance
The SRA Proposal reads as follows
Resolved The shareholders of ATT Inc urge the Board to determine
future awards of performance-based compensation for executive officers
using measure of earnings that excludes non-cash pension credits that
result from projected returns on employee pension fund assets and to
report annually to shareholders on the specific financial performancemeasure used to award performance pay
ATT believes that the LIUNA Proposal may be omitted from its 2008 proxymaterials because the Staff and Affiliates Fund failed to provide documentary
support that it meets the eligibility requirements of Rules 14a-8b and 14a-8fand ATT has already substantially implemented the LIUNA Proposal
pursuant to Rule 14a-8i10 In the event the Staff is unable to agree that the
LIUNA Proposal may be excluded pursuant to Rules 14-8ab 14a-8f and 14a-
8i1O then ATT believes the SRA Proposal may be omitted from its 2008
proxy materials pursuant to Rule 14a-8i11 because it substantially duplicates
the LIUNA Proposal that will be included absent concurrence from the Staff for
its exclusion in its 2008 proxy materials In the event the Staff is unable to agree
Securities and Exchange Commission
December 10 2007
Page3of 11
that the SRA Proposal may be excluded pursuant to Rule 4-8ai1 then
ATT believes certain statements in the supporting statement of the SRAProposal the SRA Supporting Statement may be omitted from its 2008 proxymaterials pursuant to Rule 14a-8i3 because the statements are materially
false misleading and/or irrelevant
Discussion
The LIUNA Proposal may be excluded from ATTs 2008 proxy materials
pursuant to Rules 14a-8b and 14a-8f because the Staff and Affiliates
Fund has failed to provide proof of ownership of the requisite value of the
Companysshares
Rule 14a-8f provides that shareholder proposals may be excluded from
companys proxy materials if the proponent fails to meet the eligibility and
procedural requirements of Rules 14a-8a through Rule 14a-8b1provides that in order to be eligible to submit proposal shareholder must
have continuously held at least $2000 in market value or 1% of the companyssecurities entitled to be voted on the proposal at the meeting for at least one year
by the date the shareholder submits the proposal If the proponent is not
registered shareholder the proponent must provide proof of ownership in one of
the two methods specified in Rule 14a-8b2i-ii Where the proponent fails to
provide proof of ownership at the time the proposal is submitted the companymust notify the proponent in writing of the procedural or eligibility deficiencywithin 14 calendar days of receiving the proposal Under Rule 14a-8fproponents response must be postmarked or transmitted electronically no later
than 14 days from the date the proponent receives the companys notification
The Staff and Affiliates Fund faxed the LIUNA Proposal to ATT on October 312007 Immediately following receipt of the three page submission consisting of
cover letter and the proposal ATT examined the submission and determined
that the Staff and Affiliates Fund was not an ATT stockholder of record by
checking the Companys stock records In its October 31 letter the Staff and
Affiliates Fund identified itself as the LIUNA Staff and Affiliates Pension Fundand stated that it is the beneficial owner of approximately 140000 shares of the
Companyscommon stock
By letter dated October 31 2007 the October 31 Letter and delivered via
UPS ATT requested that the Staff and Affiliates Fund submit proof of
ownership of at least $2000 in market value of ATT Inc.s common stock for at
least one year prior to the date the Staff and Affiliates Fund submitted the LIUNA
Proposal ATT Inc has obtained confirmation from UPS that the October 31
Letter was delivered to the Staff and Affiliates Funds Washington DC office and
signed for on November 2007
Securities and Exchange Commission
December 10 2007
Page of 11
On November 2007 ATT received fax from Wachovia Bank the Broker
Letter which states in part that it is the record holder for 73600 shares of
ATT Inc common stock held for the benefit of the Laborers Local Union and
District Council Pension Fund
The LIUNA Proposal identifies the proponent as the LIUNA Staff and Affiliates
Pension Fund In addition to the first sentence in the cover letter stating that the
LIUNA Proposal was being submitted on behalf of the LIUNA Staff and Affiliates
Pension Fund the letterhead on which the cover letter is printed is marked
LIUNA Staff Affiliates Pension Fund Nowhere in the cover letter or the
proposal itself is the proponent identified as anything other than the LIUNA Staff
and Affiliates Pension Fund The cover letter also states that the Staff and
Affiliates Fund is the beneficial owner of approximately 140000 shares of the
Companys common stock The Broker Letter in contrast does not refer to the
Staff and Affiliates Fund It states that Wachovia Bank is the record holder of
73600 shares of ATT common stock for the benefit of the Laborers Local
Union and District Council Pension Fund In addition to the difference between
the names of the two funds the number of shares represented as being
beneficially owned in the Broker Letter is different indicating still further that the
Broker Letter pertains to shareholder other than the Staff and Affiliates FundBecause the Broker Letter does not identify the Staff and Affiliates Fund as the
beneficial owner of any shares of ATT stock it does not satisfy the
requirements of Rule 14a-8b
Because the October 31 Letter was delivered to the Staff and Affiliates Fund on
November 2007 the Staff and Affiliates Fund had until November 15 2007 to
respond to ATTs request and to submit proof of ownership under the 14-daydeadline of Rule 14a-8f As of the date of this letter ATT has received no
correspondence relating to the LIUNA Proposal other than the Broker Letter
Therefore because the Staff and Affiliates Fund has failed to provide proof of
ownership of any shares of stock in ATT Inc it does not meet the eligibility
requirements set forth in Rule 14a-8b for submitting proposal and therefore
its proposal may be excluded under Rule 14a-8f
The LIUNA Proposal may be excluded from ATTs 2008 proxy materials
pursuant to Rule 14a-8i10 because ATT has substantially implementedthe LIUNA Proposal
Rule 14a-8i10 provides that company may exclude shareholder proposal if
the company has already substantially implemented the proposal As the Staff
has noted proposal need not be specifically implemented to be excluded under
the principles of Rule 14a-8i10 See SEC Release No 34-20091 August 161983 stating that company need not have fully implemented proposal to
Securities and Exchange Commission
December 10 2007
Page 5of 11
avail itself of an exclusion under the provisions of the precursor of the current
version of Rule 14a-8 Staff no-action letters have established that companyneed not comply with every detail of proposal in order to exclude it under
Rule 14a-8i10 Differences between companys actions and proposal are
permitted so long as companys actions satisfactorily address the proposals
underlying concerns See Masco Corporation March 29 1999 permitting
exclusion because the company adopted version of the proposal with slight
modification and clarification as to one of its terms Proposals have been
considered substantially implemented where the company has implemented
part but not all of multifaceted proposal See Columbia/HCA Healthcare Corp
February 18 1998 permitting exclusion of proposal to establish healthcare
compliance committee because company had ethics committee with similar
responsibilities
As expressed in the supporting statement the underlying concerns of the LIUNA
Proposal are that executive compensation plans for senior executives be
designed and implemented to promote long-term corporate value and that
critical design feature of well-conceived executive compensation plan is close
correlation between the level of pay and the level of corporate performanceATTs executive compensation program addresses these concerns Asdiscussed in ATTs 2007 proxy statement the 2007 Proxy the HumanResources Committee the Committee has adopted the following principles
among others for establishing the amount and form of executive compensation
Maximize the alignment of executive compensation with the long-term
interests of stockholders
Base both short-term bonuses and long-term compensation on
performance measures
The LIUNA Proposal requests that ATT establish an executive compensation
plan for senior executives that has five specified features As discussed below
ATT has implemented in whole or in part each of the five specified features of
the LIUNA Proposal The following discussion is based on the 2007 Proxy and
thus primarily covers compensation for 2006 Except as noted below ATTscompensation practices for 2007 were not materially different
Sets compensation targets for the Plans annual and long-term incentive
pay compensation at or below the peer group median
In 2006 the Committee granted executive officers long-term incentives in the
form of performance shares for the 2006-2008 performance period The
Committee determined the total amount of long-term incentives to grant each
executive officer except the Chief Executive Officer by generally targeting the
50th percentile of the long-term market and then adjusting for the relative value of
Securities and Exchange Commission
December 10 2007
Page 6of 11
each position within the company Executive officers salaries are also generally
targeted to the 50th percentile of the market as adjusted for the relative value of
each position within the company Although short-term incentives are generally
not tied to the 50th percentile long-term incentives generally represent 68% of
executive officers direct compensation and together with salary generally
represent 80% of executive officers direct compensation Therefore 80% of
executive officers direct compensation is generally tied to the 50th percentile
Delivers majority of the Plans target long-term compensation through
performance-vested not simply time-vested equity awards
Beginning in 2004 the Committee decided to use performance shares instead of
stock options or restricted stock to tie the incentive pay of executives more
directly to performance and to minimize the dilution of stockholder interests to
which equity-based compensation programs may contribute The Committee
continued that policy in subsequent annual grants Therefore the Committee
exclusively uses performance shares as long-term compensation for executive
officers
Provides the strategic rationale and relative weightings of the financial and
non-financial performance metrics or criteria used in the annual and
performance-vested long-term incentive components of the Plan
With respect to short-term awards the Committee establishes performance
targets after reviewing our business plan and determining the short-term
business metrics managers should focus on most in order to drive results For
2006 the financial and operational targets for short-term awards for the Named
Executive Officers except for Mr Sigman and Mr Dorman were based on net
income free cash flow customer satisfaction and customer churn weighted
50% 30% 10% and 10% respectively
The Committee uses return on invested capital as the performance measure for
long-term awards Return on invested capital encourages managers to focus not
only on net income but also to ensure that the companys capital is invested
effectively
In setting Mr Whitacres long-term compensation and the portion of
Mr Stephensons long-term compensation that was awarded in connection with
his appointment as Chairman and Chief Executive Officer in 2007 the
Committee decided that 75% of their performance shares would be tied to return
on invested capital and the remaining 25% of the award would be based on the
comparison of ATTs total stockholder return to relevant companies in the
North American Telecom Index
Securities and Exchange Commission
December 10 2007
Page 7of 11
Establishes performance targets for each Plan financial metric relative to
the performance of the Companys peer companies
With respect to performance targets for long-term compensation the Committee
establishes performance targets for total stockholder return relative to the
performance of the Companys peer companies As described above 25% of
Mr Whitacres and 25% of portion of Mr Stephensons long-term incentive
award is based on the comparison of ATTs total stockholder return to relevant
companies in the North American Telecom Index Furthermore beginning in
2008 25% of the long-term incentive awards of all executive officers will be
based on the comparison of ATTs total stockholder return to relevant
companies in the North American Telecom Index
Limits payment under the annual and performance-vested long-term
incentive components of the Plan to when the Companys performance on
its selected financial performance metrics exceeds peer group median
performance
With respect to the portion of long-term incentives that is tied to total stockholder
return as discussed above if the Companys total stockholder return is below
the percentile as compared to relevant companies in the North American
Telecom Index the payment will be between and 50% of the target award
According to the Staff the determination that company has substantially
implemented proposal depends upon whether its particular policies practices
and procedures compare favorably with the guidelines of the proposal SeeTexaco Inc March 28 1991 permitting exclusion of proposal that companysubscribe to Valdez principles where company had adopted policies practices
and procedures with respect to the environment Because ATTs executive
compensation program addresses the underlying concerns of the LIUNA
Proposal and because ATT has partially or completely implemented each of the
specified features of the LIUNA Proposal ATT believes that its executive
compensation program compares favorably with the LIUNA Proposal Therefore
ATT believes that it has substantially implemented the LIUNA Proposal and
thus that it may properly omit the LIUNA Proposal from its proxy materials
pursuant to Rule 14a-8i10
Securities and Exchange Commission
December 10 2007
Page of 11
The SRA Proposal may be excluded from ATTs 2008 proxy materials
pursuant to Rule 4a-8i1 because the SRA Proposal substantially
duplicates the LIUNA Proposal
Under Rule 14a-8i11 proposal may be omitted if the proposal substantially
duplicates another proposal previously submitted to the company by another
proponent that will be included in the companys proxy materials for the same
meeting In considering whether proposals are substantially duplicative the Staff
has taken the position that proposals do not have to be identical in scope to be
excluded under Rule 14a-8i11 Rather the Staff has considered whether the
principal thrust or focus of the proposals is the same See Constellation Energy
Group Inc February 19 2004 proposal requesting performance and time-
based restricted stock grants for senior executives in lieu of stock options
substantially duplicates broader prior proposal requesting CommonsenseExecutive Compensation program including limitations on CEO salary annual
executive bonuses form and amount of long-term equity compensation and
severance agreements as well as performance criteria Moreover the Staff has
agreed that proposals addressing the same subject matter in different terms and
with broader or narrower scope of subject matter than prior proposals may be
excluded under Rule 14a-8i11 See Verizon Communications Inc February
20 2007 proposal that at least 75% of future equity compensation awards to
senior executives be performance-based substantially duplicates broader prior
proposal that no future stock options be awarded to anyone
Both the LIUNA Proposal and the SRA Proposal seek to impose limits on the use
of performance-based equity compensation Although the LIUNA Proposal is
broader than the SRA Proposal the principal focus of each proposal is on the
measures used for performance-based equity compensation awards The LIUNA
Proposal requires that such measures be established relative to ATTs peer
companies while the SRA Proposal requires that such measures exclude non-
cash pension credits Because both proposals are focused on limiting the
financial measures that ATT uses for performance-based equity compensation
the SRA Proposal is substantially duplicative of the LIUNA Proposal and thus
may be excluded under Rule 14a-8i11
Certain statements in the SRA Supporting Statement may be excluded from
ATTs 2008 proxy materials pursuant to Rule 14a-8i3 because the
statements are materially false misleading and/or irrelevant
Rule 14a-8i3 provides that company may omit proposal from its proxy
statement if the proposal or supporting statement is contrary to any of the
Commissionsproxy rules including Rule 14a-9 which prohibits materially false
or misleading statements in proxy soliciting materials Staff Legal Bulletin
Securities and Exchange Commission
December 10 2007
Page of 11
No 14B September 15 2004 confirms that Rule 14a-8i3 permits companyto exclude proposal if among other things the company demonstrates
objectively that factual statement is materially false or misleading See Sara
Lee Corporation July 31 2007 permitting company to exclude materially false
or misleading portions of supporting statement from proxy materials
The SRA Supporting Statement contains statements that are false misleading
and/or irrelevant In particular none of the data in the SRA Supporting Statement
relates to periods more recent that 2002 and much of it relates to ATT Corprather than to SBC Communications Inc or ATT Inc Prior to November 18
2005 ATT Inc was known as SBC Communications Inc SBC OnNovember 18 2005 SBC acquired ATT Corp and SBC changed its name to
ATT Inc Moreover the SRA Supporting Statement refers in some instances to
ATT without drawing distinction between ATT Corp and SBC or
ATT Inc Each statement in the SRA Supporting Statement that the Companybelieves is false misleading and/or irrelevant is set forth and discussed below
In recent years substantial share of ATTs reported earnings has not
been cash flow from ordinary operations but rather accounting rule
income from pension credits
The only support offered for the above statement comes four paragraphs later
For example SBC Communications which merged with the old ATT used
non-cash pension credits to add $1.14 billion to reported operating income in
2002 Apparently the above statement refers to the fact that SBCs 2002
operating income included net pension benefit of $1 .137 billion For the years
2003 through 2006 however the net pension benefit was negativea net
pension cost of $89 million $8 million $135 million and $78 million respectively
Thus there is no year more recent than 2002 for which SRA could assert that
SBC or ATT Inc used non-cash pension credits to add anything to reported
operating income because in each of those years the net pension cost reduced
operating income Because the above statement is demonstrably inconsistent
with SBC and ATT Inc.s reported financials for the years 2003 through 2006the Company believes that it is materially false and misleading
Similarly management at the pre-merger ATT added $1.3 billion in
pension credits to earnings in 2000 through 2002 based on projected
$5 billion net gain on pension investments In 2000 pension credits of
$775 million accounted for nearly one-fifth 19.7% of ATTs pretax
income
In reality ATTs the pension trust actually lost $2.9 billion over this three
year period Meanwhile the pension surplus deteriorated from $9 billion
surplus to less than $1 billion by year-end 2002
Securities and Exchange Commission
December 10 2007
Page 10 of 11
The data in each of the above statements relates to ATT Corp not to SBC or
ATT Inc Although the first sentence above refersexplicitly to pre-merger
ATT the second and third sentences above refer simply to ATT which
could lead shareholders to believe that the second and third sentences as well
as the fourth refer to SBC Moreover while general discussion of pensioncredits and SBC and ATT Inc financial data may be relevant to the SRAProposal ATT Corp financial data particularly ATT Corp financial data that
is no more recent than 2002 is not relevant to the SRA Proposal Therefore the
Company believes that the above statements are materially misleading and
irrelevant
According to Wall Street Journal report June 25 2001 companies can
use pension accounting to manage their earnings by changing
assumptions to boost the amount of pension income that can be factored
into operating income
The article referred to in the above sentence entitled Study Finds Almost
Third of Big U.S Companies Are Getting Part of Earnings From Pension Plansdeals with report by securities analyst The sentence being quoted in the
above statement appears in its entirety in the cited Wall Street Journal article as
follows
The report issued by Credit Suisse First Boston Corp accounting analystJane Adams also hints that companies can use pension accounting to
manage their earnings by changing assumptions to boost the amount of
pension income that can be factored into operating income The Wall
Street Journal Study Finds Almost Third of Big U.S Companies Are
Getting Part of Earnings From Pension Plans Michael Rapoport and
Phyllis Plitch June 25 2001
The above statement from the SRA Supporting Statement is misleading because
it suggests that the report in question was prepared by the Wall Street Journal
whereas the report was prepared by third party and merely described in anarticle in the Wall Street Journal Moreover by omitting the word hints SRA has
drastically altered the meaning of the sentence by presenting as the reportsconclusion something that according to the Wall Street Journal article wasmerely suggested by the report Therefore the Company believes that the above
statement is materially false and misleading
For the reasons discussed above the Company believes that each of the
statements from the SRA Supporting Statement set forth above is materially
false misleading and/or irrelevant and thus may be omitted from the SRA
Securities and Exchange Commission
December 10 2007
Page 11 of 11
Supporting Statement pursuant to Rule 14a-8i3 and the Staff interpretations
thereunder
Conclusion
For the reasons set forth above ATT believes that it may omit the LIUNA
Proposal from its proxy materials for its 2008 Annual Meeting under Rules 14a-
8b 14a-8f and 14a-8i10 In the event the Staff disagrees then ATTbelieves that it may omit the SRA Proposal from its 2008 proxy materials
pursuant to Rule 14a-8i11 because the SRA Proposal substantially duplicates
the previously-received LIUNA Proposal In the event the Staff further disagrees
then ATT believes that it may omit certain statements in the SRA Supporting
Statement from its 2008 proxy materials pursuant to Rule 14a-8i3 because the
statements are materially false misleading and/or irrelevant
Please acknowledge receipt of this letter by date-stamping and returning the
extra enclosed copy of this letter in the enclosed self-addressed envelope
Since rely
Enclosures
cc Ms Jennifer ODell LIUNA Staff and Affiliates Pension Fund
JoAnn Alix-Gagain SNET Retirees Association Inc
Jane Banfield
1W 1f
VERE HJThES
MIKE QUEVD0.JR
ThRRENCE 1-jEALY
RAYMOND POCINO
EDWARD SMiTH
JAMES HALE
JOSEPJ-i MANCINELLL
ROCCO DAVIS
VINCENT MASINO
DENNIS MARTIRE
MANO FREY
i7372026 LIUNA
LIUNA STAFF AFFILIATES PENSION FUNDRECEIVED
To
Jax
From
Pages
COMMENTS
OCT 200
CORFORATEOFFICE
ROBERT RiCHARDSON
J0S MORENO
JOHN HEGARTY
MICHAEL BEARSE
MARX SPEAIE5Ttind lthtar
905 15th Street NWWashirgtan D.C
20006-1755
O0 544-3840
or .202 737-1664
Fax 202 347-0721
CONFIDENTIALITY NOTICE This transmission incJudin all attached pages is intended onlyfor the use of the named addrc ccs and may contain information that is privileged or exemptfor disclosure under applicable law if you are not named addressees you are herebynotified that any use dissemination distribution or copying of this transmission is
strictly
prohibited If you have received LhiS transijiissio in error please destroy afl copies and notifyus immediately at 202 737-1664
PAGE 01/134
BOARD OF TRUSTEF.S
TERENCE cYSULLI VANClolunlan
ARMAND SABITONI
fax ran
Date
ANN EFFINGER MEULEMAN
210-351-3521
MARK SPEAKES
including fax cover sheet
iU/31/2007 1@28 2027372025 LIUNA PAGE 02/04
SENT VIA FAX 2JO351-352J
October 31 2007
Ms Ann Effinger Meuleman
Senior Vice President and Corporate Sc
ATT Inc
175 East Houston Street
San Antonio TX 78205
Dear Ms Meulenian
On behalf of the LIUNA Staff
submit the enclosed shareholder propo
Inc Company proxy statement to
conjunction with the next annual macti
under 14a-S Proposals of Security Hi
Commissions proxy regulations
The fund is the beneficial owni
Companys common stock which hav
prior to this date of submission The
governance system at the Company tha
manage die Company for the long-tern
generating capacity over the long-term
shareholders End other important const
The Fund intends to hold the
annual meeting of shareholders The
appropriate verification of the Funds
the undersigned or designated rcpres
consideration at the annual meeting of
If you have any questions or
Jennifer ODell Assistant Director of
202-942-2359 Copies of corrcsponde
be forwarded to Ms ODell in care ofAmerica Corporate Governance Prolec
20006
frnd Affiliates Pension Fund Fund hereby
Proposal for inclusion in the ATTcirculated to Company shareholders in
of shareholders The Proposal is submitted
lders of the U.S Securities and Exchange
br of approximately 140000 shares of the
been held continuously for more than year
oposal is submitted in order to promote
enables the Board and senior management to
Maximizin.g the Companys wealth
will best serve the interests of the Companytuents of the Company
frarcs through the date of the Companys next
cord holder of the stock will provide the
leneficia ownership by separate letter Either
ntative will present the Proposal for
sli to discuss the Proposal please contact Mshe LIUNA Department of Corporate Affairs at
ce or request for no-action letter should
he Laborers International Union of North
905 6th Street NW Washington DC
LIUNA STAFF AFFI IATES PENSION FUND
zretaryBOARD OF TRUSTEES
TERENCE OSULLIVANCJi.trrnati
ARMAND SABITONI
VERb FIAYNES
MIKE QUEVEDOJR
TERRENCE HEAL
RAYMOND POCINO
EDWARD SMITH
JAMES HALE
JOSEPH MANC1NELLE
ROCCO DAViS
VINCENT MASINO
DENNIS MARTIRE
MANO FREY
ROBERT RICHARDSON
JOSE MORENO
JUFIN HEGARTY
MICHAEL BEARSE
MARK SPEAKESFund .4drnnjsrawr
905 lath Strcct N.WWatngtan D.C
8305443840ctX202737ili364
Æ.ctio2 7-0721
cc Jennifer ODell
Enclosure
2/372O26 LIUNA PAGE 03/04
Resolved That the shareholders of ATT Inc Company request that theBoard of Directors Executive Compensation Committee adopt Pay for SuperiorPerformance principle by establishing an executive compensation plan for senior
executives Plan that does the following
Sets compensation targets for the Plans annual and long-term incentive
pay components at or below the peer group medianDelivers majority of the Plans target long-term compensation throughperformance-vested not simply time-vested equity awardsProvides the strategic rationale and relative weightings of the financialand non-financial performance metrics or criteria used in the annual andperformance-vested long-term incentive components of the PlanEstabhshes performance targets for each Plan financial metric relative tothe performance of the Companys peer companies andLimits payment under the annual and performance-vested long-termincentive components of the Plan to when the Companys performance onits selected financial performance metrics exceeds peer group medianperformance
Supporting Statement We feel it is imperative that executive compensationplans for senior executives be designed and implemented to promote long-termcorporate value critical design feature of well-conceived executivecompensation plan is close correlation between the level of pay and the level ofcorporate performance The pay-for-performance concept has receivedconsiderable attention yet all too often executive pay plans provide generouscompensation for average or below average performance when measuredagainst peer performance We believe the failure to tie executive compensationto superior corporate performance has fueled the escalation of executivecompensation and detracted from the goal of enhancing long-term corporatevalue
We believe that the Pay for Superior Performance principle presentsstraightfotward formulation for senior executive incentive compensation that will
help establish more rigorous pay for performance features in the CompanysPlan strong pay and performance nexus will be established when reasonableincentive compensation target pay levels are established demandingperformance goals related to strategically selected financial performance metricsare set in comparison to peer company performance and incentive paymen areawarded only when median peer performance is exceeded
We believe the Companys Plan fails to promote the Pay for SuperiorPerformance principle in several important ways Our analysis of the Companysexecutive compensation plan reveals the following features that do not promotethe Pay for Superior Performance principle
Il2/Jjf11f iJ28 227372O26 LIUNAPAGE G4/@4
The CEOstotal compensation is targeted at the 75th percentile of the peergroupTotal annual compensation for all officers is targeted above marketmedian
The annual and long-term incentive plans provide for below target payoutThe target performance levels for the annual incentive plan metrics are notpeer group related
The company does not disclose performance targets for the portion of thelong-tern incentive compensation that is not peer group related
We believe plan designed to reward superior corporate performance relative topeer companies will help moderate executive compensation and focus seniorexecutives on building sustainable long-term corporate value
Nancy Justice
Director SEC ComplianceattATT Inc
175 Houston Room 216San Antonio Texas 78205Ph 210351.3407
October 2007
Via UPSMs Jenn 11cr ODell
Department of Corporate Affairs
LIIJNA Staff Affiliates Pension Fund905 Street NWWashington DC 20006
Dear Ms ODell
Today we received your faxed letter dated October 2007 submitting shareownerproposal for inclusion in ATTs 2008 Proxy Statement We are currently reviewing theproposal to determine if it is appropriate for inclusion in our 2008 Proxy Statement
Under the rules of the Securities and Exchange Commission SECH in order to heeligible to submit shareowner proposal shareowner must he the record or beneficialowner of at least $2000 in market value of ATTs common stock at the time proposal issubmitted and have continuously owned these shares for at least one year prior to submittingthe proposal Therefore in accordance itli the rules of the SEC please provide us withdocumentary support that both of the above-mentioned
requirements have been met For sharesheld by broker the broker must provide us with written statement as to when the shares werepurchased and that the minimum number of shares have been continuously held for the one yearperiod must provide the documeniatjn rpeci/edahe and your response must hepostmarked or eiecironica//y transnftIed no later than /4 days from your receipt o/ this letter
Please note that if you or your qualifIed representative do not present the proposal at themeeting it will not he voted upon The date and location for the 2007 Annual Meeting ofStockholders vil he pros ided to ou at later date
Si nccrcl
cc \iaI-k \V SI3CakCS
NOV-1-2007 1600 FRUMWlCHOuI TIREMENT 703 760 631
Todd NcwmaWachovja Bank N.AWachoyja Retirement Services
1753 Pinnacle Dr VA1981
McLean VA 22102Tel 703-760-6294
Fax 703-760-6431
TO 103513521
4i VIeu ry-Cry
NOV Ci 2007
SECRA
N01-27 16 FROML4iCHOUI TIRENENT 73 76 431
Sent Via Fax 210-351352
Noveniber 2007
Ms Ann Effinger MeulemSenior Vice President and
ATT Inc
175 East Houston
San Antonio TX 78205
rporate Secretaiy
TO l513521
Dear Ms .MculemanJf
Wachovja Bank is the recor holder for 73600 shares of ATT Jnc Companycommon stock hed for the lØnefit of the Laborers Local Union and Disirjct CouncilPension Fund Fund Thf Fund has been bene.tcjaj owner of at least 1% or $2000in market value of the Comnycommon stock continuously for at least one year priorto the date of submission ofhc shareholder
proposal submiftecf by the Fund pursuant toRule 14a-8 of the Securities tndExchange Coiiimjssjon rules and regulatio The Fundcontinues to hold th.e shares Company stock
Mark Cloud
Assistant Vice President
RECEIVFD
N0v2 17007
SECRETARYS OFACENovember 19 2007
Ann Meuleman
Senior Vice President and Secretary
ATT Inc
175 Houston
San Antonio Texas 78205
Dear Ms Meuleman
On behalf of the SNET Retirees Association Inc SRA hereby submit the attached
stockholder proposal for inclusion in the Companys next proxy statement as permitted
under Securities and Exchange Commission Rule 14a-8 intend to present this proposal
at the Companys 2008 annual meeting
The resolution urges ATTs Board of Directors to determine future awards of
performance-based compensation for executive officers using measure of earnings that
excludes non-cash pension credits that result from projected returns on employee
pension fund assets and to report annually to shareholders on the specific financial
performance measure used to award performance pay This policy was adopted by the
old ATT in 2004 but apparently not included in the post-merger CorporateGovernance Guidelines
The Association owns 985.87 shares of the Companys common stock and is held byAT Shareholder Services at Computershare Trust Company as the attached statement
shows The Association intends to maintain this ownership position through the date of
the 2008 Annual Meeting plan to introduce and speak for the resolution at the
Companys 2008 Annual Meeting
Thank you in advance for including our proposal in the Companys next definitive proxystatement If you need any further information please do not hesitate to contact me at
203-758-2409
Sincerely yours
/l
JoAnn Alix-Gagain
President
SNET Retirees Association Inc
Exclude Pension Credits from Calculations of Performance-Based Pay
The SNET Retiree Association Inc SRA P.O Box 623 Orange CT 06477 owner of985.87 shares of the Companys common stock hereby submit the following shareholder
resolution for inclusion in the Companys proxy statement for the 2008 Annual Meeting
Resolved The shareholders of ATT Inc urge the Board to determine future awards of
performance-based compensation for executive officers using measure of earnings that
excludes non-cash pension credits that result from projected returns on employeepension fund assets and to report annually to shareholders on the specific financial
performance measure used to award performance pay
SUPPORTING STATEMENT
In recent years substantial share of ATTs reported earnings has not been cash flowfrom ordinary operations but rather accounting rule income from pension credits
Because pension credits reflect neither operating performance nor even actual returns
on company pension assets we believe these credits should not factor into performance-based executive compensation
When this resolution was submitted by one of its co-sponsors to the pre-merger ATTthe Boards Compensation and Employee Benefits Committee adopted it as an executive
compensation policy February 23 2004 The Committee stated in the 2004 proxystatement that are joining many other companies which are adopting similar
compensation policies which our Board believes comport with evolving best practices
for executive compensation
Unfortunately the policy was not included in ATTs post-merger Corporate
Governance Guidelines We believe it should be
Pension income is simply not good measure of managements operating performancePension credits are not even based on actual investment returns but on the expected
return on plan assets and other assumptions set by management
Continued
Exclude Pension Credits from Calculations oJPer/irmance-Based Pay Page
For example SBC Communications which merged with the old ATT used non-cash
pension credits to add $1.14 billion to reported operating income in 2002
Similarly management at the pre-merger ATT added $1.3 billion in pension credits to
earnings in 2000 through 2002 based on projected $5 billion net gain on pension
investments In 2000 pension credits of $775 million accounted for nearly one-fifth
19.7% of ATTs pretax income
In reality ATTs the pension trust actually lost $2.9 billion over this three-year periodMeanwhile the pension surplus deteriorated from $9 billion surplus to less than $1 billion
by year-end 2002
According to Wall Street Journal report June 25 2001 companies can use pension
accounting to manage their earnings by changing assumptions to boost the amount of
pension income that can be factored into operating income
An institutional Shareholder Services ISS issue brief explained that although in manycases pension assets plummeted in value non-cash pension credits boosted not only
reported earnings but also performance-based executive pay AccountingPension Credits Plump Executive Pay ISS April 2002
Because ATTs management retains great discretion over the assumptions used to
calculate pension credits we believe that excluding this accounting rule income from
calculations of executive pay will help to assure shareholders that this discretion will not
lead to conflicts of interest
In addition if incentive pay formulas encourage management to skip cost-of-living
adjustments expected by retirees or to reduce retirement benefits expected by employees
as we believe ATT did in switching to cash balance pension plan in our opinion
ATTs ability to recruit and retain experienced employees could be undermined
Please VOTE FOR this resolution
omputershare
CompUtPtbare Investor Services
250 RoyallStreet
Carton MsssathusettS 02021
www .computershre.COm
November 14 2007
SNET RETIREES ASSOC INC
ATTN JOANN ALIX GAGAIN
BOX 623
ORANGE CT 06477
Company Name ATT INC ATT
Nolder Account NumIer
RegitratIofl Snet Retirees --- soc Inc
Dear Sir Madam
We have received your request regarding the above referenced account
Please note that the above referenced account holds 985.873693 shares since September 14 2005
If you have any further questions please visit our web site at www.computerShate.C0m/att Or you may contact us
by phone at 800-351-7221 We offer an automated telephone service to assist you at any time or you may reach
representative Monday through Friday AM to PM Eastern Time
Sincerely
ffrey Wallach
tanton Contact Center Group
ATT Shareholder Services at Computerstiare
66782
REF JW/U1R0000732052
*** FISMA & OMB Memorandum M-07-16 ***
CORNISH HITCHCOCKATTORNEY AT LAW
200 STREET NW SUITE 600f-.1Q
Ut WASHINGTON D.C 20005202684-6610 Fjtx 202315-3552
CONH@NITOHLAW.COM
14 January 2008
BY UPS
Office of the Chief Counsel
Division of Corporation Finance
Securities Exchange Commission
100 Street N.EWashington D.C 20549
Re ATT Inc 2008 Annual Meeting
Shareholder Proposal by SNET Retirees Association
Dear Counsel
This letter is submitted on behalf of the SNET Retirees Association CSRA or
the Proponent which along with co-ifier Jane Banfield submitted shareholder
proposal the SRA Proposal to ATT Inc ATT or the Company By letter
dated 20 December 2007 ATT Letter the Companyscounsel advised that
ATT plans to omit from its 2008 proxy materials this resolution which proposes
that ATTs Board exclude non-cash pension trust accounting credits in the measure of earnings used to determine performance-based compensation for senior executives In addition ATT seeks to omit certain statements from SRAs Support
ing Statement on the ground that they are materially false or misleading For the
reasons set forth below we respectfully ask the Division to deny the no-action relief
sought by ATT
The SRA Proposal
The SRA Proposal requests that ATTs Board adopt an executive compensalion policy that had been in place at the pre-merger old ATT Under this policy
the Board would calculate performance-based compensation using measure of
earnings that does not include non-cash accounting credits to net income resulting
from projected increases in the pension fund surplus The Resolution states
Resolved The shareholders of ATT Inc urge the Board to determine fu
ture awards of performance-based compensation for executive officers using
measure of earnings that excludes non-cash pension credits that result from
projected returns on employee pension fund assets and to report annually to
shareholders on the specific financial performance measure used to award
performance pay
This method of adjusting earnings to exclude pension accounting credits for
the purpose of determining performance-based executive pay has been the subject of
shareholder proposals at number of other companies including the old ATTVerizon Qwest and Lucent Technologies The boards of each of those companies
subsequently adopted the policy after strong showings of shareholder support
ATT advises that independently of the SNET Proposal the Company received separate compensation proposal from the LIUNA Staff and Affiliates Pension Fund comparison of the two proposals however shows that they are as dif
ferent as night and day
The LIUNA Proposal seeks adoption of Pay for Superior Performance pol
icy Resolutions of this type have been submitted at dozens of companies over the
past two years The LIUNA Proposal states
RESOLVED That the shareholders of ATT Inc Company request that
the Board of Directors Executive Compensation Committee adopt Pay for
Superior Performance principle by establishing an executive compensation
plan for senior executives Plan that does the following
Sets compensation targets for the Plans annual and long-term incentive
pay components at or below the peer group medianDelivers majority of the Plans target long-term compensation through
performance-vested not simply time-vested equity awardsProvides the strategic rationale and relative weightings of the financial
and non-financial performance metrics or criteria used in the annual and
performance-vested long-term incentive components of the PlanEstablishes performance targets for each Plan financial metric relative to
the performance of the Companys peer companies andLimits payment under the annual and performance-vested long-term incentive components of the Plan to when the Companys performance on its
selected financial performance metrics exceeds peer group median perfor
ance
ATTs Letter seeks to omit the LIUNA Proposal by arguing that LITJNA
allegedly failed to meet the eligibility requirements of Rules 14a-8b and 14a-8fand because ATT allegedly has already substantially implemented the proposal
thus permitting exclusion under Rule 14a-8ilO In the alternative ATT seeks
to omit the SRA Proposal under Rule 14a-8i1 as being substantially duplicates
the LIUNA Proposal which ATT received first ATT also seeks to exclude cer
tarn statements in SIRAs Supporting Statement on the ground that they are mate
rially false and misleading within the meaning of Rule 14a-8i3
This letter will not address the issue of LIUNAs eligibility but will confine
itself to showing why the SRA Proposal may not be excluded under Rule l4a-8i1l
and why ATTs objections to certain language does not require ay amendment to
satisfy Rule 14a-8i3
SRAs Proposal Does Not Substantially Duplicate the LIUNA Proposal
shareholder proposal maybe excluded under Rule l4a-8ill only if it
substantially duplicates another proposal previously submitted by another share
holder that will be included in the companys proxy materials for the same meeting
Assuming that the LIUNA Proposal is not excludable on technical grounds Propo
nents believes that its own pension credits proposal does not substantially duplicate
the LIUNA Pay for Superior Performance proposal In fact other than the superficial fact that both proposals generally touch on the topic of better aligning execu
tive compensation with performance there is not even an area of overlap between
the proposals
fatal defect in ATTs argument here is that if ATTs Board voluntarily
adopted every detail of LIUNAs Pay for Superior Performance proposal such
policy would not include or address in any way the policy proposed by the SRA The
thrust of SRAs pension credits proposal is very narrow It seeks to exclude non-cash
pension accounting credits related to projected returns on employee pension trusts
from the measure of earnings used to determine awards of performance-based
compensation It therefore focuses very narrowly on how earnings are to be defined
for purposes of calculating executive performance awards In contrast LRJNAs
proposal does not seek to define the measure ofearnings at all Rather the LIUNA
Proposal takes the measure of earnings as given and proposes detailed Pay for
Superior Performance plan the thrust of which is to require that equity awards be
performance-vested not simply time vested and to limitpayment under the in
centive components to when the Companys performance on its selected financial
performance metrics exceeds peer group median performance In other words if
LIUNAs Pay for Superior Performance scheme was adopted in every proposed de
tail the Board would retain the discretion either to include or exclude pension ac
counting credits in the measure of earnings used to determine if the peer-beating
performance criteria had been achieved or not
ATTs argument can also be viewed in relation to the substantially imple
mented standard of Rule 14a-8ilO Presumably if one proposal substantially
duplicates another pursuant within the meaning of Rule 14a-8l then if the com
pany adopts one of the two proposals the other proposal by definition would have
been substantially implemented But that is not even arguably the case here If
ATT voluntarily implemented LIUNAs Pay for Superior Performance policy to
day ATT could not reasonably claim that it had substantially implemented the
SRA Proposal within the meaning of Rule 14a-8i10 because in fact the Pay for
Superior Performance policy would not have addressed the treatment of pension
accounting credits to corporate earnings in relation to executive pay
ATT argument simply ignores the specific and detailed Pay for Superior
Performance scheme that LIUNA has actually proposed Instead the Company
relies on broad-brush assertion that because both proposals are motivated by
desire to better align senior executive compensation with financial performance
then ipso facto they must substantially duplicate one another Although both pro
posals may have been motivated by general desire to better align pay with perfor
mance they address entirely different aspects of the compensation-setting process
There is no overlap between the proposals and thus certainly no substantial dupli
cation The SRA Proposal does not propose any specific type of incentive pay
whereas LIUNA would linmit long-term incentive pay to performance-vested eq
uity awards nor does the SRA Proposal propose any specific criteria to trigger performance vesting whereas LIUNA would limit awards to performance that exceeds
peer group median performance Rather the SRA Proposal proposes that to the
extent the Board chooses to use earnings as criteria then it should use
measure of earnings that excludes non-cash pension credits
Various iio-action determinations involving either the i10 or il exclu
sion support the conclusion that compensation-related proposal may not be ex
cluded simply because it intersects at some oblique angle with an existing corporate
policy or competing proposal that has been submitted by another shareholder
E.g Xce1Eneiy Inc 30 March 2007 pay-for-superior-performance proposal not
mooted by existence of performance-based policy Wal-Mart Stores Inc 27March 2007 same ATT Inc March 2005 proposal on golden parachutes
does not substaiitially duplicate proposal on SERP Minnesota Mining andManu
factizring Go March 2001 proposal to establish performance-based senior
executive compensation system focusing on long-term success is not mooted by
existing equity tans that focused more on the vagararies of the stock market than
conmpany-specihc factors requested in the proposal Pacific Gas andElectric Go
February 1993 approving inclusion of three proposals on non-salary compensation of management henig tied to performance indicators ceilings on future total
compensation of officers and directors and payment of directors in common
stock
In tiizon Coininiiiiic/ions Inc 20 February 2007 upon which ATT re
lies the competIng proposals involved equity-based performance compensation that
were oniy slightly different in scope 1-lere by contrast the intersection between
the topics of the two proposals are so slight as to be non-existent ATT may not
rely upon the il exclusion to omit the SRA Proposal
The Supporting Statement is Not Materially False or Misleading
The ATT Letter goes on to argue in the alternative that certain statements
in the SRA Supporting Statement may be excluded. pursuant to Rule 14a-8U3
because the statements are materially false misleading andlor irrelevant We re
ject this blatant attempt to undermine SRAs ability to make this somewhat obscure
issue concerning the impact of pension credits on earnings and thereby on execu
tive pay understandable to shareholders fair reading of the Supporting State
ment makes it clear that read in context none of the sentences singled out by
ATT is materially false or misleading
The thrust of ATTs complaint is that none of the data in the SRA Support
ing Statement relates to periods more recent than 2002 and much of it relates to
ATT Corp rather than to SBC Communications Inc or ATT Inc ATT Letter
at With respect to highlighting 2002data ATT seems to be arguing that
Proponents are making weak case not that they are making false or mislead
ing case
ATT does not deny that in 2002 and the years immediately prior to then
both the pre-merger ATT ATT Corp and SBC Communications Inc each
boosted their reported earnings by more than $1.1 billion using pension credits
Proponents believe that it would be good policy to reinstate ATT Corps previous
policy abandoned after the merger to exclude pension accounting credits from the
calculation of executive compensation ATT may disagree that events in 2002
should influence how shareholders vote on this issue in 2008 but we believe that
the persuasive weight of an argument based on 2002 data is matter for the share
holders to decide ATT can use its own Opposing Statement in the proxy to argue
the point and without being limited to the word count limits that Rule 14a-8 im
poses on shareholders
It would he one thing if Proponents had somehow implied that the 2002 data
were 2007 data 1-lowever the Supporting Statement is very clear as to the year
and amount by which pension credits boosted earnings at each of the former com
panies hat recently merged to create the new ATT
Likewise the Supporting Statement takes pains to distinguish between the
pre-merger or post-merger ATT At the very beginning of the Supporting
Statement Proponents include the following language conveniently ignored by the
ATT Letter which makes the remaining paragraphs clear in context with respect
to the distinction between the pre-mergerATTand SBC
When this resolution was submitted by one of its co-sponsors to the pre
mergerATT the Boards Compensation and Employee Benefits Committee
adopted it as an executive compensation policy February 23 2004 The
Committee stated in the 2004 proxy statement that are joining manyother companies which are adopting similar compensation policies which our
Board believes comport with evolving best practices for executive compensa
tion
Unfortunately the policy was not included in ATTs post-merger Corporate
Governance Guidelines We believe it should be
For example SBC Goniin imica tions which 112 erged with the old ATTused non-cash pension credits to add $1.14 bfflion to reported operating in
come in 2002
Similarly management at the pre-merger ATT added $1.3 billion in pension credits to earnings in 2000 through 2002 based on projected $5 billion
net gain on pension investments In 2000 pension credits of $775 million ac
counted for nearly one-fifth 19.7% of ATTs pretax income
emphasis added
The Proponents were very careful to distinguish between the pre-merger
ATT SBC Communications which merged with the old ATT and the post-
merger ATT Shareholders know the difference In context it is clear that both
the pre-merger ATT Corp and SBC boosted earnings in excess of $1.1 billion
during the 2000 to 2002 period with non-cash pension accounting credits The
ATT Letter does not dispute those numbers because they come straight from the
two companies Form 10-K
The ATT Letter claims one additional sentence is misleading because it implies that The Wall Street Journal reported that companies can use pension
accounting to manage their earnings by changing assumptions to boost the amountof pension income that can be factored into operating income In fact The Wall
Street Journal reported that an analysis published by Credit Suisse First Boston
Corp made that claim With 500-word limit on both the resolution and support
ing statement shareholders inevitably try to economize on unnecessary wordiness
Proponents believes it is not false or misleading to state that the sentence quoted
above was to rvi1Ist1eetJol1rnai1eport June 25 2001 In fact the
conclusion of the Credit Suissse First Boston Corp study was in fact reported in
The Wall Street Journal
We fail to see how the challenged statement is false or misleading either materially or otherwise Nonetheless should the Staff agree with ATT on this point
the Proponents would be willing to amend the Supporting Statement to insert the
following underlined new text
According to Wall Street Journal report June 25 2001 Credit Suisse First
Boston Corp accounting analyst Jane Adams suggested that companies can
use pension accounting to manage their earnings by changing assumptions to
boost the amount of pension income that can be factored into operating in
come
Conclusion
Under Rule 14a-8g the burden of proof is on the registrant to establish the
applicability of any of the exclusions set forth in Rule 14a-8i Because ATT has
failed to meet its burden of demonstrating that the substantive elements of Proponents resolution have been substantially implemented or that the identified word
ings are materially false or misleading the Proponents respectfully ask the Divi
sion to advise ATT that the Division cannot concur with the Companys objections
Thank you for your consideration of these points and please do not hesitate
to contact me if you require further information We would be grateful if you could
please fax the undersigned copy of the Divisions determination once it is available
at 202 315-3552
Very truly yours
4UCornish Hitchcock
cc Paul Wilson ATT Legal DepartmentJennifer ODell LIUNA Staff and Afliliates Pension FundJoAnn Alix-Gagain SNET Retirees Association Inc
Jane Banfield